Swedish support of UN Reform

Ms. Anna Jardfelt Ambassador of Sweden to Kenya and Mr. Siddharth Chatterjee UN Resident Coordinator to Kenya. Credit: UN Kenya

By Sweden Embassy Press Release
NAIROBI, Kenya, Apr 3 2019 (IPS-Partners)

Swedish support of UN Reform and the UN Secretary General’s call for a reinvigorated Resident Coordinator function – Advancing coordination, innovation and results in UN’s contributions to Kenya’s development priorities.

    “Delivering as One – Going to the furthest first”.

Several members of the Development Partners Group in Kenya, including Sweden have at various occasions reiterated the importance of UN Reform and the UN Resident Coordinator Office, leading and coordinating the delivery of UN development results to Kenya.

Sweden is today pleased to acknowledge a new agreement, supporting the UN Resident Coordinator for a period of two years under the heading Reinvigorated UN Resident Coordinator’s Office, advancing the UN Reform Implementation Plan in Kenya.

“Sweden is a strong advocate for UN reform. This bridging support will enable the Resident Coordinator’s office in Kenya to spearhead the UN reform at country level, maintain current capacity and advance transformative and repositioning work, for greater impact and sustainable development results. This work will be done in line with UN reform and in support of Kenya’s national, regional and global development priorities and aspirations,” said the Ambassador of Sweden Ms. Anna Jardfelt when she announced the support.

The Resident Coordinators Office capability to spearhead UN reform in Kenya, continue lead and advance coordination, innovation and communication of results is essential for UN’s effective delivery of its total contribution to Kenya, the United Nation Development Assistance Framework, UNDAF, 2018-2022, signed by Government of Kenya and 23 UN Heads of Agencies, with an estimated budget close to USD 1.9 billion for the current 4-year period.

    About the UN in Kenya
    As stated in the UN SG implementation plan of the UN Reform, member States’ calls for a reinvigorated RC system, which ultimately rest in the transformation of the development landscape, as reflected in the 2030 Agenda for Sustainable Development. Its universal, integrated and people-centered nature, which integrates economic, social and environmental dimensions of development, requires a collaborative, coordinated and innovative response by the UN development system, at an unprecedented scale. This needs to be matched by equal ambition in the organization, operations, funding and overall mindset of the UN development system to ensure integrated action towards the Sustainable Development Goals (SDGs), in a way that leaves no-one behind.

    The Resident Coordinator in Kenya is expected to lead impartially, accelerate and leverage initiated efforts. In June 2018, the UN Resident Coordinator, the Cabinet Secretary for National Treasury, Cabinet Secretary for Devolution and ASAL, and the entire UN country team of 23 UN Heads of Agencies, including the World Bank and the IMF, signed a new United Nations Development Assistance Framework for Kenya at a value of USD 1.9 billion. The new UNDAF 2018-2022 was widely consulted and has been identified by the Deputy Secretary General as one of three global best examples of new generations of One UN strategies at the country level.

    The Resident Coordinator’s Office leads, coordinate and incubate UN wide and joint actions on strategic policy, innovative approaches, expanded partnerships and diversification of investments, advancing the UN SG reform agenda and Kenya’s development strategies, at national and devolved levels, including a new partnership platform for expanding private sector and philanthropy in realizing SDGs and the Presidential Big 4 Agenda in Kenya. The platform under the Resident Coordinator coordinates efforts to diversify development financing tools, invest in SDG data development and nurture public, private partnerships, across the SDGs and UN agency mandates.

    The Cross-Border Programme between Kenya and Ethiopia, with ongoing discussions on expansion to the borders of Uganda and Somalia is another example of a Joint GoK/UN/partner flagship, advancing the reform agenda on transformative peace and socio-economic transformation. With improved coordination costs can be saved and impact increased, fragmented projects can be replaced by integrated approaches, resources can be further optimized by matching national, county, private and development partner’s value addition.

    Comprehensive responses to inequality and citizenship, empowering gender and human rights driven development, can re-focus strategies from short term emergency response towards prevention, resilience, socio-economic transformation – leaving no one behind. Only with concerted efforts can development efforts counter the threats of poverty driven radicalization, forced migration and cyclical conflicts and utilize untapped opportunities, release the creativity of young women and men to realize the Kenya Vision 2030 -shared prosperity.

Smart Cities hold Key to Sustainable Development

By Armida Salsiah Alisjahbana
BANGKOK, Thailand, Apr 3 2019 – Asia and the Pacific’s phenomenal development has been a story of rapid urbanization. As centres of innovation, entrepreneurship and opportunity, cities have drawn talent from across our region and driven economic growth which has transformed our societies.

In southeast Asia alone, cities generate 65 percent of the region’s GDP. Yet the ongoing scale of urbanization is a considerable challenge, one which puts huge pressure on essential public services, housing availability and the environment.

How we respond to this pressure, how we manage our urban centres and plan for their future expansion in Asia and the Pacific, is likely to decide whether recent development gains can be made sustainable.

It is of primordial importance to Malaysia as its economy powers towards high income status. In ASEAN countries, 90 million more persons are expected to move to cities by 2030.

Accommodating this influx sustainably will determine whether the United Nations’ 2030 Agenda for Sustainable Development can be achieved, and the climate targets of the Paris Climate Agreement can be met.

An effective response calls for integrated planning across all levels of government. Greater consideration needs to be given to demographic and land use trends to anticipate their impacts and minimize environmental damage. These trends should inform our investments in infrastructure but also in water, energy and transport services.

Closing the infrastructure gap in the region will alone require an additional $200 billion of investment a year until 2030. We know local government revenues are mostly insufficient and fiscal decentralization inadequate to respond to this need.

Intelligent fiscal reforms to improve local revenues are likely to be necessary and we will need to consider how we can capture land value and use Public-Private Partnerships.

In the most disaster-prone region in the world, it is incumbent on us to reduce the risk of natural disasters to which millions of urban dwellers are exposed. By 2030, vulnerable populations living in extreme risk areas – along river banks, canals and slopes – are expected to have grown by fifty percent since 2015 in many of region’s major cities.

Some cities, including Melaka, are participating in initiatives such as the 100 Resilient Cities, focused on community-based disaster risk reduction. Yet this effort needs to be given even greater scale if we are to achieve risk resilient cities in our region. Accelerating our multilateral cooperation and best practice sharing could make a valuable contribution to doing so.

New technologies hold great promise for more effective urban solutions. From smart grids and district energy solutions, or real-time traffic management, to waste management and water systems, smart technologies will enable our future cities to operate more effectively.

They could also make them more inclusive and accessible for persons with disabilities. We have an opportunity to incorporate universal design standards and systems such as automated access to audio-based communications to improve accessibility to cities for persons with disabilities.

We must encourage smart city developers to use standards which would give persons with diverse disabilities full access to the physical infrastructure and information others enjoy.

As we look to overcome all these challenges, the ASEAN Smart Cities Network designed to mobilize smart solutions throughout southeast Asia, is a welcome development on which we must build.

The implementation of this network is something the organization I represent, the United Nations Economic and Social Commission for Asia and the Pacific, has worked to support.

Combined with the ASEAN’s broader Sustainable Urbanization Strategy, it is helping provide much needed resource in the region to manage urbanization better. Twenty-six cities, including Kuala Lumpur and Johor Bahru are developing visions for their cities to apply technologies for smart and sustainable urban development.

The expertise being acquired is invaluable to the broader region’s effort. Malaysia has a leading role to play. At the 9th World Urban Forum Malaysia hosed last year, experts came from the world over to focus on cities for all and the New Urban Agenda.

In October 2019, the 7th Asia Pacific Urban Forum will be held in Penang. My hope is that this can focus minds and galvanize support for best practice to be shared and sustainable urban development to be prioritized in Asia and the Pacific.

“They’re like those bad football fans”

It’s been called the most important election in decades. The coming elections to the European Parliament will take place in May, and some believe it will be a springboard for the parties on the far right. But what would the consequences of that be for the labour markets in the European Union’s member states?

Rock Cohen/CC-BY-2.0

By Erik Larsson
STOCKHOLM, Apr 3 2019 – It’s been called the most important election in decades. The coming elections to the European Parliament will take place in May, and some believe it will be a springboard for the parties on the far right. But what would the consequences of that be for the labour markets in the European Union’s member states?

EU. “They’re like those bad football fans. They’ll try to demonstrate their power and start chanting slogans any time a decision needs to be made,” says Swedish Social Democrat Marita Ulvskog.

She has served as vice chair of the European Parliament’s Committee on Employment and Social Affairs for five years, and has led the Social Democrats in the parliament for ten.

With the experiences from those years under her belt, she has gotten a lot of insight in how the far-right in Europe reasons on issues relating to the labour market.

At the moment, 7 out of 52 delegates in the committee belong to parties that are considered to be positioned on the far right. Among them are neo-Nazi Golden Dawn from Greece, right-wing populist National Rally and Lega Nord from France and Italy, and fascist Jobbik from Hungary.

The extreme right in the five biggest countries of the European Union

Germany. Right-wing populist party Alternative for Germany was founded in 2012 but has grown fast and is now the third biggest party in the country. They are against immigration and sceptical of the EU and are believed to get around 12 percent in the upcoming election to the European Parliament ,which is 5 percentage points more than in the last election.

France. National Rally, led by Marine Le Pen, is predicted to get around 20 percent according to several polls. It’s a few percentage points lower than last election but that will hardly affect the number of seats. The party is predicted to become the country’s second largest.

Italy. Lega Nord and the The Five Star Movement,who are in government together, are predicted to get strong support in the EU election, over 32 and 22 percentage of the votes respectively. The firm support for these two parties is believed to be a contributing factor of how the far right is growing in the EU parliament.

Spain. Until recently, the far right had been remarkably absent in the country, but in 2013, a faction from conservative party Partido Popular went off to form right-wing populist party Vox, which has been growing steadily. The party is predicted to end at up between 8 and 13 percent.

Poland. The government party Law and Order are dominating Polish politics and can, according to predictions, get support at up around 40 percent. At the same time, another party from the right is growing stronger, far-right populist party Kukiz’15. The party was formed by rock musician Pawel Kukiz who is sceptical of the EU and wants to reform the polish election system.

*The UK is currently the third biggest country in the EU but considering the fact that it is leaving the EU it was not included in this summary.

Sources: Politico’s Poll of Polls – European elections 2019, Europaportalen

Marita Ulvskog says that the far-right members in the committee often stick together when voting. They mostly support propositions from the established conservative parties, but sometimes they’ll vote for left-wing propositions which align with trade union policies.

The far-right parties are often in favour of strong unemployment benefit policies and certain kinds of social welfare reforms.

In Poland, national-conservative government party Law and Justice recently increased child support. In Hungary, Victor Orbán’s government wants to introduce a tax break for women with four or more children, in an effort to encourage women to give birth to more “Hungarian” children.

“They often want to appear to be progressive in matters regarding trade union rights. Meanwhile, they vote very differently to us when it comes to issues concerning women’s rights in the labour market,” says Marita Ulvskog.

In the last few years, several nationalist trade unions have emerged throughout Europe.

In the south of Germany, a few far-right trade unions came together under the name “Patriotic Unions”, which has close ties to right-wing populist party Alternative for Germany.

Their foothold is strongest within the auto industry. IG Metall has actively tried to counter their organisation and so far, the right-wing unions have not been very successful.

Swedish author and commentator Lars Jederlund has been following European politics since the 1990’s and recently released the book Ödesvalet(The Fateful Election), about right-wing parties in Europe.

He explains that it’s a motley crew of parties, with many different outsets. Some are fascists, others religious right-wing fundamentalists or right-wing populists. He places the Swedish Democrats in the group “Ethnocentric right-wing parties”, together with Poland’s Law and Justice and the Danish People’s Party.

Their differences aside, there are some unifying factors.

“They oppose immigration and the EU,” says Lars Jederlund.

If the far right manages to strengthen its position after the election, the number of members of parliament with critical views on issues like free trade agreements will increase, which could affect the labour market.

These parties are also sceptical of the Union’s initiatives to reduce social injustice.

The Swedish Democrats strongly oppose the European Pillar of Social Rights, because the party worry that it will lead to regulations that will affect the Swedish model.

Already today, seven EU member states are led by parties on the far right; Poland, Hungary, Austria, Italy, Slovakia, the Czech Republic, and Bulgaria. Most polls indicate that the right-wing parties will increase their number of seats after the election, while the Social Democrats of Europe are predicted to make a weak election.

Marita Ulvskog explains that the reason for this development is that the European Social Democrats haven’t been as good as these parties at storytelling.

“This, of course, is because we can’t trick people. We have to stick to the truth and they don’t.”

Franziska Schröter, from the German political think tank Friedrich Ebert Stiftung, which has close ties to the German Social Democrats, works with analysing the growing far-right movement.
She says that these political parties put a lot of effort into spreading their message online.

“Here, Alternative for Germany has about 20 employees working with social media to spread the messages of its parliamentarians. The Social Democrats have two.”

“That’s a massive gap. You could say that the established parties are focusing on doing their job and advancing politics while Alternative for Germany are focusing on communication.”

Theres another factor too. Followers of the far right are much more active on social media, and they attack their opponents on the internet.

“They are passionate and they hate,” she says.

“Hate is a much easier feeling to foster than love. To affect others by spreading fear is very effective.”

*Arbetet Global has tried to reach the Swedish Democrats and Golden Dawn for comments.

This story was originally published by Arbetet Global

Education for All—Refugees Too

Rohingya girls taking religious education lessons at a Madrasah in the camps. Since January, the Government of Bangladesh has ordered the expulsion of Rohingya refugee children from the country’s schools, prompting an outcry from human rights groups. Credit: Kamrul Hasan/IPS

By Tharanga Yakupitiyage
UNITED NATIONS, Apr 3 2019 – Young Rohingya refugees are now facing new hardships as the Bangladeshi government cracks down on their education and future opportunities.

Since January, the Government of Bangladesh has ordered the expulsion of Rohingya refugee children from schools, prompting an outcry from human rights groups.

“The Bangladeshi government’s policy of tracking down and expelling Rohingya refugee students instead of ensuring their right to education is misguided, tragic, and unlawful…education is a basic human right,” said Human Rights Watch’s (HRW) senior children’s rights researcher Bill Van Esveld.

“If education is for all, education should be for Rohingya,” an expelled Rohingya student told HRW.

The expelled students, who are among the 34,000 registered Rohingya refugees living in camps in the Teknaf and Ukhiya sub-districts in Cox’s Bazar, were born in Bangladesh after their families fled Myanmar in the early 1990s.

However, the majority of Rohingya children, including those born in Bangladesh, are not formally recognised as refugees and are not allowed to enrol in Bangladeshi schools.

Without access to education, Rohingya families often paid for Bangladeshi birth certificates or other documents in order for their children to attend school.

One student said his family spent months saving to pay 3,500 taka or 42 dollars to buy a Bangladeshi brith certificate so that they can pass as Bangladeshi nationals.

Another student pretended his parents were dead to avoid listing their refugee camp address on his school application.

In January, officials sent a notice to the directors of seven secondary schools in Teknaf and a government official in Ukhiya which warned about the increase in Rohingya children’s school attendance and the “dishonest public representatives” who have helped them acquire documents.

“We were informed by the intelligence agencies under the Prime Minister’s Office that Rohingya children are attending different educational institutions in Teknaf sub-district. It is ordered … to take strict measures so that no Rohingya children can attend any Bangladeshi educational institutions outside of the camps,” the notice said.

While it is unclear how many Rohingya were expelled, the notice listed the names and addresses of 44 Rohingya students and included orders to expel them as well as any others.

The founder of one secondary school said intelligence officials warned him that having Rohingya students was “not safe for the country, not safe for our people.”

Van Esveld criticised the move, stating: “The solution to children feeling compelled to falsify their identities to go to secondary school isn’t to expel them but to let them get the education they deserve.”

Mohammed recounted the day he got expelled to HRW, stating: “[The headmaster] said that if there were any Rohingya, the Education Ministry will cancel the license of the school. When the notice was read out, the headmaster said, ‘I know who all the Rohingya are. Don’t hesitate, leave your books and IDs here and go.’ In the class, in front of the Bangladeshi students, they separated us out, and told us to leave.”

Rahim was in English class when a vice principal came and asked the Rohingya students to leave.

“I went to a secret place and I cried. My aim was to be a doctor. What should I do now?” he said.

While there are some schools in refugee camps, they are not formally accredited and only run through to grade 8.

Refugee children at camp schools are also barred from taking national examinations or receiving official certifications indicating that they passed any level of education.

Without formal education, Rohingya children have no proof of their education and are unable to apply to universities.

HRW urged Bangladesh to stop the expulsion of Rohingya students and to ensure all children are able to receive a formal education.

In April 2018, the United Nations Committee on Economic, Social, and Cultural Rights also expressed concern over the Rohingya’s lack of access to education and recommended Bangladesh to fully incorporate the International Covenant on Economic, Social, and Cultural Rights (CESCR), of which Bangladesh is a party to, into domestic law.

CESCR includes the importance of children’s rights to all levels of education regardless of immigration or refugee status.

“As long as Rohingya refugee children aren’t able to obtain a formal education in the camps, Bangladesh should allow them to enrol in local schools,” Van Esveld said.

“The government should stop thwarting Rohingya students’ right to learn,” he added.

China and Developing Countries: Managing Chinese Investments

rapid economic growth in China has made it an economic powerhouse that increasingly plays a leading role on the world stage as a trade partners as well as a source of investment.

The harbour expansion in Colombo seeks to tap into the lucrative Indian shipping trade, with Chinese help. Credit: Amantha Perera/IPS

By Daud Khan
ROME, Apr 3 2019 – Fifty years ago China was a poor country with little influence in the international sphere and without even a seat at the United Nations. Since then rapid economic growth in China has made it an economic powerhouse that increasingly plays a leading role on the world stage as a trade partners as well as a source of investment.

China’s development trajectory has been much different from most other developing countries which have been often been buffeted by political and economic problems and have failed to grow at anywhere near their potential.

In the first of this two part article we would like to explore how best developing countries can benefit from the ongoing and planned flow of Chinese investments into the country. In the second part we will look at some of the key element of China’s development experience and, see what lessons we can draw for policies and programmes.

The most iconic and discussed manifestation of China’s increased economic and political clout is the Belt and Road Initiative that aims to link China with markets in Europe and Asia.

The impact of Chinese investments is likely to be enormous and transformational in developing countries, especially in those countries that have been stuck in a trap of slow growth and low investment. This is a huge opportunity but in order to maximise its benefits it is essential that these investments are well managed and regulated.

The Initiative is largely about improving trade and logistics. At the same time, major investments are also being made in mining, manufacturing, agriculture and services – both for export to the Chinese markets as well as for sale in domestic markets. These investments are being made in both developed and developing countries.

However, their impact is likely to be enormous and transformational in the latter, especially in those developing countries that have been stuck in a trap of slow growth and low investment. This is a huge opportunity but in order to maximise its benefits it is essential that these investments are well managed and regulated.

Most Chinese firms investing overseas tend to be middle to large enterprises. Many are state owned, or subsidiaries of state owned companies, and, as such, enjoy good government connections and backing.

These factors give them superior bargaining power vis-a-vis local counterparts and there is risk that the terms of agreement may be tilted in their favour. Such risks are particularly acute in countries where counterpart local enterprises tend to be small with limited financial and administrative skills.

There is an urgent need for laws, regulation and guidelines that ensure that contracts and agreements signed are fair and equitable. This is critical for all sectors, but especially so for activities such as mining, which require massive investment and long gestation periods, where agreements can be for decades.

A number of critical aspects require public oversight including royalty payments and financial parameters, such as interest rates, depreciation rates and insurance fees.

There is also a need to ensure that prices charged for the output of Chinese firms sold in local markets are fair and within reach of domestic consumers;  that there is no “transfer pricing” in the case of exports – this is a practice where companies sell at low prices to parent companies overseas in order to reduce profits and tax liabilities, while at the same time reducing the inflow of foreign exchange into the host country; that taxes, duties and other levies are fully paid in time; that negative environment impacts are mitigated and, when necessary, remedial actions are put in place; that workers are paid fair wages and that essential services such as medical assistance and education are provided to them; and that current land owners, farmers and tenants are not displaced from their lands and houses.

It may appear that these conditions are harsh and risk alienating Chinese investors.  However, Chinese investment should not be simply an opportunity to make a quick return but as a long-term partnership that is based on mutual benefits that are shared, also with workers.

These conditions, including on transfer pricing, are common for transnational investors in most developed countries and in these countries Chinese companies have no problem adhering to them.  There is no reason that similar condition are not set in developing countries and that Chinese firms should comply with them.

Moreover, over the last couple of decades, under pressure from consumer lobbying, boycotts and law suits in their countries of origin, many US and European companies, including the large multinationals, are increasingly conforming to such laws and regulations.

Many of them now also have significant Corporate Social Responsibility programmes. Chinese companies, if they expect to complete in the medium to long-term with Western corporations, must be prepared to do the same.

It is Government’s prerogative and duty to make laws, regulations and guidelines to manage overseas investment.  However, such laws are notoriously difficult to implement in developing countries with limited governance capacities.

It will be more so in the case of Chinese investors which, as mentioned above, tend to be big and well connected.

Moreover, it is unlikely that NGOs, pressure groups and civil society groups in China will take it upon themselves to lobby against unfair trade or manufacturing operations of Chinese companies in other countries, as happened in the case of US and Europeans companies.

In this situation, much responsibility rests with the civil society, the press and the judicial system in developing countries.  These institutions need to take up the challenge.

This will not be easy and help would be required from the international development community. At political level, the UN and other official agencies need to help governments to daft laws and regulations; and international NGOs, lobby groups and consumer associations will need to create and help counterpart organizations in developing countries.

However, the most difficult hurdle will be for Governments in developing countries to start seeing civil society organizations, the press and the judicial systems as key partners in the development process and not as impediments to trade and financial partnerships.

 

Daud Khan has more than 30 years of experience on development issues with various national and international organizations. He has degrees in economics from the LSE and Oxford; and a degree in Environmental Management from the Imperial College of Science and Technology.  

Increasing Leprosy Cases in Micronesia Points to Better Detection and Awareness

By Stella Paul
POHNPEI , Apr 3 2019 – Elizabeth Keller is one of the most senior health officials in the Federated States of Micronesia (FSM).
She is the current acting chief of Public Health and also the head of the leprosy programme in the island nation’s capital of Pohnpei.
While Pohnpei has the largest number of leprosy cases in the country—nearly 100 new cases are reported here every year—Keller says that more new cases doesn’t necessarily present an alarming picture. She says that this should be viewed instead as a positive sign that the government’s activities are effective as more people are coming forward to be diagnosed than ever before.

During a recent visit of the Sasakawa Health Foundation/Nippon Foundation team to Micronesia’s Health Ministry, Keller talks about how her department is trying to protect the children of Pohnpei from leprosy, otherwise known as Hansen’s disease. She also talks of the unique perspective and strength that a female leader like her can bring to public health.

The Crucial Role of the Military in the Venezuelan Crisis

By Dr Diego Lopes da Silva and Dr Nan Tian
STOCKHOLM, Apr 3 2019 – In January 2019 Venezuela’s opposition-led National Assembly swore in congressman Juan Guaidó as the country’s interim president. Guaidó’s claim to power is a severe blow against the already weakened government of Nicolás Maduro, whose re-election as president in May 2018 was widely rejected by the international community and deemed illegitimate by over 50 foreign governments.

Since January 2019, about 65 countries—including the United States and countries in Western Europe and most of South America—have given their support to Guaidó. The USA has also imposed sanctions on the state oil company, Petróleos de Venezuela SA (PDVSA), and several state-owned banks.

However, countries such as China, Cuba and Russia continue to back Maduro and recognize him as the legitimate president of Venezuela.

Although the support of foreign states is an important factor in the current political standoff between Maduro and Guaidó, it is the Venezuelan military that will determine whether there is any shift in power. Historically, the armed forces have played a decisive role in the country’s politics: the military oversaw Venezuela’s transition to democracy in 1958 and has had a strong influence on domestic politics ever since.

The 1958 Punto Fijo Pact—the political agreement aimed at preserving democracy in Venezuela in the post-authoritarian period—rested on a compromise with the military: in return for transferring power to civilian hands, the military would have its equipment modernized and its salaries revised.

The administration of President Hugo Chávez (1999–2013) further strengthened the position of the armed forces by populating the state bureaucracy with military officers and implementing large-scale arms modernization programmes, which took Venezuelan military spending to record levels.

This feature of Venezuelan politics has not gone unnoticed by Guaidó, who has attempted to garner support from the armed forces by offering amnesty to defectors. So far, the bulk of the military has remained loyal to Maduro: in the wake of the National Assembly’s appointment of Guaidó as interim president, the defence minister, Vladimir Padrino, stated that Venezuela’s armed forces disavow any president who is self-proclaimed.

Nevertheless, despite Padrino’s assurances, cracks have formed in the military’s support for the Maduro administration. Since February, about 560 soldiers, who recognized Guaidó as the country’s interim president, have fled to Colombia.

Amid these developments, the military is on the cusp of an important choice: preserve the status quo or support a new leader. The final decision will largely depend on the offers made by Maduro and Guaidó.

Military incentives: power, money and arms

Since 1958, the Venezuelan armed forces have traded military support for the government in exchange for money, power and prestige. This bargaining process was reinforced under the Chávez administration, which offered the military political power, money and arms, and strengthened the development of a military–government symbiosis.

One of Chávez’s first and major accomplishments was to approve a new constitution in 1999, creating the Bolivarian Republic of Venezuela, also known as the Fifth Republic. This served as the foundation for the military’s rise to the higher echelons of political power.

Article 328 of the new constitution, for example, incorporated the armed forces into the maintenance of social order and the formulation of Venezuela’s national development plans.

Perhaps more importantly, Article 236 granted Chávez the right to approve promotions of colonels and generals—an instrument he used regularly to purge dissidents and promote loyal officers.

As a result, military officers took on key positions in state-owned companies, ministries and funding agencies. According to Transparencia Venezuela, at least 60 of the 576 state-run companies are led by the military, including PDVSA.

The militarization of the government has continued under Chávez’s successor, Maduro. As of January 2019, 9 of 32 government ministries were controlled by the military, including the ministries of agriculture and energy.

As a consequence, the military’s influence on and within government has grown to a level not seen in Venezuela since the end of Marcos Pérez Jiménez’s dictatorship in 1948.

Off-budget mechanisms

Venezuelan military spending soared under the Chávez administration. In 2006 it surpassed that of Brazil—which at that time had an economy over five times larger than Venezuela’s.

Chávez’s spending was enabled by the unprecedented oil boom that started soon after he took office, which allowed him to strengthen his grip on power by distributing money to his supporters—a long-standing pattern in Venezuelan politics.

However, the total amount of funding allocated to the armed forces since the establishment of the Fifth Republic remains the subject of debate. The uncertain estimates are due to the existence of off-budget mechanisms in military funding.

Off-budget military funding is the allocation of funds for defence functions from outside the regular state budget. This can include revenues from mineral extraction or from military business activities.

Venezuela’s main off-budget funding instrument is the National Development Fund (Fondo de Desarrollo Nacional, FONDEN), funded primarily by the Central Bank of Venezuela and PDVSA. Created in 2005, FONDEN was intended ostensibly to foster economic growth and sustainable development in Venezuela.

However, because the military has been constitutionally integrated into the Venezuelan development strategy since 1999 (Article 328 of the constitution), its activities are eligible for FONDEN’s support. The office of the president has exclusive control over FONDEN, which exempts it from oversight by the National Assembly.

SIPRI’s 2017 review of Venezuelan military spending concluded that since 2005 a substantial amount of the country’s oil revenue and state resources had been diverted to the military using FONDEN. For example, between 2005 and 2015 FONDEN allocated around $6.9 billion to the military to finance 39 projects.

The largest of those was an allocation of $2.2 billion for the purchase of 24 Su-30 combat aircraft from Russia. On average, off-budget allocations from FONDEN increased Venezuela’s annual military spending by 26 per cent for the period 2005–15.

As FONDEN is funded primarily by oil revenues, its level of contribution to Venezuelan military spending each year reflects the annual fluctuations in oil prices. Between 2005 and 2015 its contribution to military spending ranged from 42 per cent in 2015, which coincided with rising oil prices, to as little as 1 per cent in 2009 and 2014, when the price of oil fell sharply.

In comparison with its allocations to other funding recipients between 2005 and 2015, FONDEN’s allocations to the military were substantial. The $6.9 billion given to the military dwarfed the $2.6 billion allocated to education and health, demonstrating a clear shift in the purpose of the fund towards militarization as opposed to development.

Through FONDEN, the armed forces have gained direct access to Venezuela’s substantial oil revenues. These funds were used in a variety of ways: for instance, $5.1 million was paid to fund the education of 40 Venezuelan cadets in Belarus in 2010, while $106 million was allocated to the general category ‘Complementary Agreement on State Security and Defence’ (Acuerdos Complementarios de Seguridad y Defensa de Estado).

However, the bulk of FONDEN’s allocations to the military was used to boost Venezuela’s ambitious military modernization programme. Chávez saw the build-up of arms as a fundamental step in sustaining his revolutionary regime: “When I talk about armed revolution, I am not speaking metaphorically; armed means rifles, tanks, planes, and thousands of men ready to defend the revolution.”

Oil revenues became the chief contributor to Chávez increasing the power of the presidency and the military force of Venezuela. Venezuelan arms imports grew significantly in the 2000s and early 2010s. The vast majority of these imports came from Russia and China.

The military maintains its strength, despite the economic downturn

Maduro became president of Venezuela after Chavez’s death in 2013 and inherited his carefully constructed militarized state apparatus. However, unlike his predecessor, Maduro came to power in a harsh economic environment. Oil prices plunged in 2014, which exacerbated the country’s economic downturn.

Venezuela has found itself embroiled in the biggest economic and social crisis of its recent history. Salaries have been negatively impacted by hyperinflation, while basic goods have become extremely scarce.

Violence has also spiked. Severe living conditions have led more than three million Venezuelans to flee the country, while millions of those who remain are calling for change.

As a reaction to a rapidly shrinking economy and falling oil production and oil revenue, Maduro turned towards the country’s food supply as a source of patronage, a commodity that went from subsidized to scarce. By exploiting a complex currency system, members of the military were able to import food at an advantageous rate of exchange and then sell it on the black market for hundreds of times the government set price.

While these privileges appear to have swayed the military to support the Maduro administration for the time being, they are mainly aimed at officers, and many lower-ranking soldiers face the same hardships as ordinary Venezuelan citizens.

In addition to its role in the exploitation of the food supply, the military occupies a position of privilege during the allocation of the state budget. Official military spending is prioritized over vital social needs such as education, housing and food.

In 2017, Maduro used his presidential prerogative to bypass the opposition-led National Assembly and approve a new budget that benefited his allies. As the rate of inflation soared into thousands of per cents in 2018, additional funding was needed for all government sectors.

Not only was the military one of the first to receive the additional resources, but it was also among the sectors that received the highest allocations of the new funding. This is not the first time the military’s budget has been protected from significant cuts—far from it. In 1962, while total public spending was cut by 12 per cent, the military budget was reduced by only 4 per cent.

The discrepancy was even greater in 1979: despite a 15 per cent reduction in total public spending, the military budget was cut by only 0.4 per cent. Thus by giving the military control of the country’s food supply and prioritizing the military in state budgets, Maduro has continued the long tradition in Venezuela of trading resources for political support in a bid to retain power.

The military’s role in shaping Venezuela’s future

The protected status of the military budget and the off-budget funding allocated to the armed forces from FONDEN are clear examples of the military’s privileged position in Venezuela, granting the armed forces a key role in shaping the country’s future.

By giving the military money, power and prestige, Maduro has—at least for the time being—‘bought’ the political backing of the armed forces. The challenge faced by Guaidó is arduous: he must somehow win over the support of a military that owes its strength to the current regime.

So far, Guaidó has offered amnesty to defectors. He has also appealed to the military’s sense of nationalism, arguing that his claim to the presidency is a people’s demand to which the armed forces should heed.

Considering the set of benefits from the current patronage system, such as the billions of dollars on offer from off-budget sources and the positions of privilege in key government posts, Guaidó might need to offer the military the same, if not better, incentives than those it has received under Chávez and Maduro.

Yet, therein lies the conundrum: if Guaidó courts the military into backing his plea by offering material incentives, he will empower the military further and be complicit in replicating one of the main weaknesses of Venezuela’s democracy.